U.S. Cellular Selling Off Some Midwest Markets to Sprint

Wireless carrier U.S. Cellular on Wednesday morning announced it has reached an agreement to sell off select Midwest markets, including Chicago, St. Louis, central Illinois, and three others in the Midwest to Sprint for $480 million.

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Wireless carrier U.S. Cellular on Wednesday morning announced it has reached an agreement to sell off select Midwest markets to Sprint for $480 million - including Chicago, St. Louis, central Illinois, and three others.

The sale includes PCS spectrum and approximately 585,000 customers, or about 10 percent of U.S. Cellular's total customer base. U.S. Cellular, the nation's seventh-largest wireless carrier, said the sale will allow it to focus on stronger markets and streamline its operations to increase efficiency.

"In the dynamic wireless marketplace, we have a clear strategy to accelerate profitable growth and increase return on investment over the long term, and we are taking decisive steps to achieve it," Mary Dillon, U.S. Cellular president and CEO, said in a statement. "Exiting these markets enables us to play to our strengths in markets where we have higher penetration and where we can effectively sharpen our proven strategy to differentiate the U.S. Cellular customer experience from other wireless carriers."

The deal, which must be approved by the Federal Communications Commission, is expected to close in mid-2013. Following the sale, U.S. Cellular will have more than 5.2 million customers. The company will retain more than 1,400 associates in the Chicago area at its headquarters and additional nearby facilities.

During the transition, U.S. Cellular plans to keep open certain retail locations in the affected markets, though these stores will eventually be closed. Once the deal is complete, the majority of U.S. Cellular's retail, engineering, and business support associates in the affected markets "will not be retained."

Dillion said the decision was "not taken lightly," given its impact on employees.

"We value and appreciate their contributions and we will provide comprehensive support for them as they make their career transitions," Dillon said. "We will also continue to deliver outstanding service and support to our customers in these markets during the transition period."

On a conference call Wednesday morning, Dillion said approximately 980 jobs will be eliminated in the affected markets, including 162 in Chicago and about 640 in the greater Chicago area.

The affected markets generated approximately $340 million in revenue this year, though after all direct and indirect costs, incurred an operating loss.

Meanwhile, U.S. Cellular also announced it will transition its Bolingbrook, Ill. Customer Care Center operations to a vendor partner on Jan. 1. As part of the deal, the majority of associates will become employees of the vendor partner. The transaction is expected to reduce facilities expenses by more than $3 million annually beginning in 2014, U.S. Cellular said.

Last month, Sprint received an infusion of cash from Softbank when the Japanese mobile provider paid $20.1 billion for a 70 percent stake in Sprint.

Angela has been a PCMag reporter since January 2012. Prior to joining the team, she worked as a reporter for SC Magazine, covering everything related to hackers and computer security. Angela has also written for The Northern Valley Suburbanite in New Jersey, The Dominion Post in West Virginia, and the Uniontown-Herald Standard in Pennsylvania. She is a graduate of West Virginia University's Perely Isaac Reed School of Journalism.
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